Question

Curvilinear costs always increase: a. When management performs break-even analysis. b. When volume increases, but at a nonconstant rate. c. In constant proportion to changes in production levels. d. On a per unit basis when volume of activity goes down. e. With decreases in volume.

Answer 1

Answer:

The correct option is : b. When volume increases, but at a nonconstant rate.

Explanation:

Curvilinear costs is a type of expense that does not increase at a constant rate with the production volume. It tends to have a sudden increase at low production volumes, then remains constant in the middle and then increases at high production volumes.

The curvilinear costs does not increase linearly with the production. Therefore, curvilinear cost is also called a nonlinear cost.

Therefore, curvilinear costs always increase at a nonconstant rate with the increase in the production volume.